Unrecorded Lease Void for New Landlord

Massapequa landlord sued to evict tenants after buying a building in a foreclosure sale. Landlord claimed that she was unaware of tenants' presence when she bought the building. A notice of pendency was recorded on June 10, 2011. Prior landlord had signed a lease with tenants for a six-year term starting Feb. 19, 2011, and ending Dec. 31, 2016, at a monthly rent of $800. The lease also required landlord to pay tenants' monthly utility bill. At the time, landlord was facing jail time and one of the tenants was former landlord's former employee. The lease was never recorded.

The court ruled for landlord. Since landlord had no knowledge of the tenancy, she wasn't bound by the lease. And since the six-year lease wasn't recorded, it was void with respect to a good-faith purchaser. The lease also was voidable under Debtor and Creditor Law Sections 273 and 276 because at a time when prior landlord was insolvent, and with intent to hinder, delay, or defraud creditors, it gave tenant/employee extraordinary rights under a "sweetheart" lease. 

Levy v. Pedersen: Index No. LT-005630-13, NYLJ 1202631715843 (Dist. Ct. Nassau; 12/5/13; Fairgrieve, J)